The Hawaii Project: Final Numbers and a Few Pictures

Man, that sure was a fun trip.

With regular life here in Colorado having resumed so seamlessly, it is sometimes easy to forget that I spent seven weeks of the winter in Hawaii. I’m back to wearing clothes and living in a house with windows, and having ready access to old friends and breathtakingly cheap groceries. I’ve even been surprisingly happy with the weather here in my home town. While far from tropical, this area still provides a few precious hours of T-shirt weather (10C/50F and above, plus sunshine and very low humidity) almost every February day, which makes for ideal cycling and construction conditions.

To celebrate, I’ve been doing a lot of cycling and construction, even embarking upon my biggest building project in years recently. I am excited to tell you about it, but before we get into that, we must first tell the Epilogue of the Hawaii story so we can all have proper closure before moving on.

As we left Hawaii, the vacation suite was just about done from a carpentry perspective, but in need of a paint job and some furnishings to add a bit of style. Owners Johnny and Jane Aloha have a busy schedule these days, with one full-time job and one very young baby between them, but with the help of visiting parents they were able to take a good pass at the work, just in time for another round of visiting guests who took over our suite. John sent me a few pictures as well as his spreadsheet detailing how much the whole thing cost in the end.

Since this is a financial blog, let’s start with the investment perspective of the project:

The goal of this new suite is to generate income for the owners, to offset the high cost of home ownership in the area. The house is in an incredibly expensive beach town, where very modest houses begin at around $700,000. The project was of special interest to me, because Jane was about to have a baby, and the income from this rental unit would make the difference between her having to return to full-time work, and being able to stay home as long as she sees fit, to raise her new daughter through the first few years of life.

A studio apartment in this area rents for about $1500/month on a long-term basis, or $80/day ($2400/month) if used as a short-term vacation rental. Taking the most conservative estimate of $1500/month, that implies an annual income of $18,000 per year.

As we went from initial planning emails through to project completion, we encountered quite a few bump-ups in the budget:

In my Colorado city, you can file for your own building permit, get full approval, and do all your own work – as long as you can follow the strict building code regulations and your work is good enough to please the well-trained local inspectors. In Hawaii, building permits are slow and expensive to approve, and you need to know which hoops to jump through to get the approval. On top of that, homeowners are forbidden from doing their own plumbing and electrical work. This drives up demand and pricing for those tradesmen, which adds a big chunk to project cost for any would-be do-it-yourselfers.

Plus, many materials need to be imported from across the ocean, and the relatively small local market prevents the large economies of scale that make daily life so inexpensive for us here on the mainland. Luckily, a few Home Depots have sprung up on the island in recent years, with only a 10% price premium over the mainland, which helps force down the otherwise-shocking prices charged by smaller chains like Ace Hardware.

Even with these extra costs, it looks like this project will turn out to be quite lucrative. Check out this summary:

Item

Store

Cost

Draftsman and Permit wait-in-line sufferer

Draftsman

$1,200.00

Board of water supply

city and county

$638.00

Permit Fees

city and county

$391.00

shower fixture

Craigslist

$40.00

shower and floor tile

Craigslist

$370.00

shower mosaic floor

Craigslist

$35.00

bathroom vanity

Home Depot

$281.78

window

Craigslist

$13.00

exterior door

Craigslist

$75.00

tiling saw, supplies, safety

Home Depot

$237.51

plumbing rough in

Plumber

$3,500.00

electrical rough in

Electrician

$2,134.00

Huge Initial Materials order

home depot

$2,604.68

queen bed

craigslist

$200.00

Construction Trash removal

George the Rock guy

$200.00

refrigerator

craigslist

$120.00

paint, hardware

hardware hawaii

$143.90

wood (finish)

hardware hawaii

$115.55

brackets, finish supplies

hardware hawaii

$125.03

counter tile, faucet, sink, etc

home depot

$1,071.49

lights

home depot

$47.99

siding, thinset

hardware hawaii

$171.69

mortar, plumbing, finish

hardware hawaii

$246.17

plumbing

hardware hawaii

$41.51

granite tile

home depot

$437.77

hardibacker

hardware hawaii

$96.26

siding, hardibacker

hardware hawaii

$635.53

joist hangars

hardware hawaii

$24.46

lumber

hardware hawaii

$101.43

trim iterms

hardware hawaii

$66.08

Food and Beer for Lead Carpenter

Mr. Money Mustache

$300.00

Total

$15,664.83

In case you were curious, Mr. Aloha calculated that the Craigslist purchases saved us about $1800 over the new-equivalent items (and over 10% of the whole project cost). Also, if you don’t live on a tropical island and thus don’t have access to free labor from blogger/carpenters, you might add in the cost of hiring a carpenter for this quantity of work, in the range of $6000-$8000 depending on local labor rates.

So despite all the cost overruns, we still ended up with a project with a Gross Return on Investment of 115% annually. You can tweak the numbers all you like, but you’ll still end up with a very good result, which pleases Mr. Money Mustache.

Here are a few pictures from the mostly-done suite. Alas, this isn’t the most photogenic work for a carpenter to profile, since we’re really looking at a drywalled room with a basic white kitchenette (at least the bathroom and fancy shower are nice). To really make this place sweet, we’d have to add some rich woodwork and built-in shelving along with bolder tropical or earthtone colors. Also, these pictures were taken by the owner at night – to get the proper impression, you need to imagine bright sun and tropical leaves streaming through the large windows which face the back and side yards (not shown in these pics).

But given the short timeframe (Most of it happened in the initial 2.5 weeks), and the great numbers above, I’m still very happy with the project.

Here’s the little kitchen area. The bulk of it is built on cheap assemble-it-yourself cabinets from HD and a $125 fridge from Craigslist. To save energy while maintaining light quality, I got 3 high-end GU10 LED track bulbs from LEDWaves (future article)

Close-up on the kitchenette details. A single bowl 18″ formed sink saves space. 12×30 granite tiles were cut to form a low-cost granite countertop surface. Nice backsplash tiles. And I built an open shelf (stained dark red) instead of using upper cabinets, to give a cleaner and more open feel to the small area.

This is a view in the other direction – glass door on left opens out to private outdoor space and exit to street. Stained door on right slides open to bathroom. Travertine tile floor throughout helps stabilize temperature and cool the feet.

Here’s where you sleep. Just a mattress on the floor for now.. but imagine a nice dark wood bedframe, a little night-stand on the side, maybe a nice painting on the wall above..

Here’s that bathroom shower again. See earlier article “How to Build a Relatively Sweet Shower” for building tips.

So that officially wraps up the Hawaii project.. and I’ve already started on something bigger: a second-story master bedroom addition on the back of a friend’s 100-year-old house here in my neighborhood. This time, we’re insourcing everything, right down to shovel-digging the massive holes for the foundation piers and pouring the concrete a few weeks ago. As of this moment, we are finishing up the floor framing and about to build the walls. It should make for a few more interesting construction and real-estate-related posts, mixed in with the financial things I have planned for you.

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Though I appreciate your humility in describing the place, it still is much better than I’d be able to pull off with my limited construction skills! Bravo Herr Mustache! I’ll be sure to move somewhere exotic and ask you to come visit– I might just have a room or two that I need help finishing too!

It would be sweet if there were a specific way your readers could make a “let’s do something awesome” offer: somewhere we could post without cluttering up your blog, without even expecting you to reply to decline.

You’d be surprised what you can learn, too! Mr. PoP knew more than I did when we started rehabbing our house, but by the time we were done with property #2 I was a lot more confident in areas that I never would have dreamed touching two years prior, like rewiring electrical outlets, installing siding, lights, blinds, etc. Not to mention I became a painting champion. Power tools still aren’t my favorite (luckily Mr. PoP likes them), but I can handle detail work like a champ.

That sounds great! I’m trying to talk the Hawaiians into getting solar on their own rooftop.. with electricity in that region about 350% of the mainland price, it is an emergency to stop buying it and start making your own.

Haha.. I imagine there are SOME people in the audience that would find that an appealing proposition, Jim.

As for me, carpentourism is a tightly-regulated activity: summers are already booked for the Canada trip. Winter trips have to be flexible with very cool hosts, family-friendly, and somewhere much warmer than Colorado – because otherwise we might as well just stay here, which is a nice place to be already. If it’s any consolation, you’d definitely qualify in the coolness department.

I recently got an amazing-sounding invitation to do a project in Beijing (!). Beautiful traditional-style home just being built, astoundingly fun and interesting guy doing the inviting.. but that distance is way beyond my son’s current airplane endurance level, and I wouldn’t want to go by myself, abandoning the lady and boy for additional weeks with all the recent travel (and a few more short events already planned).

Gosh! I am super impressed! That entire living area looks clean and functional and I love the shower. I am inspired now to rip out an upstairs bathroom and remodel it …. it needs it, circa 1975. Nice job!

If you say the guy saved $6K on labor, what was the point for you to come over and do it for free? Say a similar place rents for $1.5K, with flights and all, you could rent a place, make 6Gs and still come back home with cash. I did the same kind of barter work where I would go some place nice and work virtually for free in exchange for housing and food but in the end if you make more with your skills I don’t really see the point.

Go back and read the whole series of posts (and comments) and see if you can figure it out. Report back to us when you know the answer. (Hint: What kind of vacation would I take if I were a multi-billionaire?)

Not really, ’cause if you’re a multi-billionaire, you buy your own island :-)

Which is what I sometimes call the quantum wealth gap. I can have everything I reasonably want, and put away a decent stash, on under $100K per year, so making more just doesn’t make a lot of sense unless I can break into to the buy your island/start your own space program territory.

Maybe OTHER people would buy their own islands or start space programs.

I’d keep riding to the grocery store on my 2008 commuter bike and cutting my own lawn with the same reel mower. It would burn too much fuel to commute regularly to a tropical island (and we’re not interested in uprooting the boy from his current school), which are the same reasons I don’t fly around more or move to an island even with the current level of wealth. I’m already polluting plenty as it is, and it is pretty much impossible for me to imagine how I would want to spend any more money on myself than I do now… believe it or not!

Ah, but you just don’t have the true billionaire’s attitude: if you don’t want to uproot the kid from his current school, you buy the school and move it to your island :-)

But I can certainly think of many ways to spend – or rather, invest – multiple billions of dollars, even though I’d keep riding the bike. Buy up half of Idaho and keep it as a wildlife preserve, buy a railroad and convert it to electric, buy up coal power plants & mines and replace them with nuclear and/or renewables…

Wow! That’s a nice looking apartment. I may have to take some of those design ideas for when we remodel our bathroom and kitchen. And at $80 a night, that’s cheaper than a night a nice hotel.
It’s also great to see how much you saved with Cragslist. I’m going to have to remember to use that when I buy my first income property.

MMM…so how much plumbing material do you believe is buried in that rough plumbing figure? My general rule in my area is that material is 1/3 and labor 2/3’s, but $3,500 for rough-in seems high on per square foot basis. I’m thinking in this case, material was only about 20% of the 3500 figure.

You are right – the high prices of plumbing work always shock me. Since we used PEX and not copper (and I even brought all the PEX fittings in my suitcase since they are much cheaper on the mainland), the total materials bill was probably well under $500. That leaves $3000 for what looked like about 20 hours of work on the part of the plumber.

It’s a fun job, takes very little time for a smart person to master, and it pays well if you own your own business – which is why I often advise younger people to consider it as a radical alternative to the conventional university track. Where else can you go from high school to financial independence in under 10 years, retiring at 27? (if done in a high-income area and combined with business smarts and Mustachian lifestyle management skills?).

Great job in the limited time! Prices in that part of HI still give me the chills up my spine! But if you are already there, you might as well make the most of it and offer something to offset your very high costs. Hard to imagine making much progress towards FI though with a $700,000 house in tow (minimum $20000 in interest a year), without renting part of it out. Sounds like you just helped save their lives ;-)

The latter part of you comment is a bit overly dramatic. With some careful analysis, you can see that a smart purchase in HI – and especially in high demand areas – can significantly reduce your cost of living if you have some rental income (that’s why everyone does it!). For example, our cost to own this house will be less than it would cost to rent a similar house. And that includes the cost of renovations in other areas of the house!!

As with all real estate, it’s smart to be an ‘expert’ on your local area. We looked at over 100 homes over a 3 year period and knew the market better than most realtors.

If MMM had declined my offer to come and live with us for a while, I simply would’ve done the work with some friends. But we would’ve missed out on a great experience!

All the inspectors I’ve met have been pretty nice. Usually semi-retired construction people themselves who take the job because they like to help other people out. Nicer to homeowners than they are to contractors.

The library books get you 95% of the way to inspection-ready work. For serious stuff life whole-house framing, electric, or plumbing, you can check a copy of the 2008 International Residential Code book (also in libraries) and photocopy the initial “design” chapter. Most towns just adopt the latest IRC a few years after it comes, so if you follow that standard, you are doing good work.

You can also ask your building department for tips. Some areas have stricter requirements, and they document those separately (California because of earthquakes, Colorado because of occasional 75MPH winds if you live near the mountains, etc.)

A lot depends on location. Where I’m originally from (midwest), the local inspectors were a pain to deal with… utter pain. They were pretty in tight w/ the unions and did everything possible to make your life miserable.

Out here in Colorado (a couple town south of MMM), the inspectors are FANTASTIC. They reviewed my plans (and loved them), the inspectors were prompt, friendly, and courteous. I had *zero* problems with my basement finish for any of the inspections (and did 100% of the work myself). Coming from telecom data center wiring, my wiring job was so far over the top in neatness, the inspector wanted the professionals to take a lesson. :-)

Regarding code: talk to your building dept to see what version of the codes they are using. They will probably have things on their website that they are particular about too (when I did mine, they were huge on properly sized egress windows in basements, and kept point out mine were not big enough (and I kept pointing out the basement has two walk-out doors, to their embarrassment)).

Thanks for the advice guys, its something to definitely be aware of; I need to brush up my building code knowledge.

When it comes to home renovations, there are basically 3 types of people:

Group 1.) The ones who are afraid of any home repair project; this group usually has very little disposable income; they regard things like carpentry and plumbing as a type of black magic; something not to be messed with by mere mortals; when their sink stops working or something breaks, they feel that it (and pretty much everything in their life) is out of their control; they will sit there and take it like bitch; they will literally live with broke stuff for years in run down houses

Group 2.) The ones who always hire a professional to do everything; got a slow drain, call a plumber; oh my that tree limb out back is too long, hunny call the tree cutters; whether they are afraid of a little sweat, injury from lack of know how, of what their friends might think, or just because its not their “thing”; this group is always getting the checkbook out and shelling it out; the pros love this group

Group 3.) The ones who are badass enough to take control of their own domain, and say if I want by bathroom (or another room) this way then damn its gonna happen one way or another; Its my way or nothing; This group will be learning, acquiring tools, growing their knowledge whenever possible, they will have confidence and more money, and they will be enjoying the fruits of their labor when its done with a sense of satisfaction and a beer to go with it.

Love seeing the renovation articles. Every time I read these it serves as a reminder to check my list of small household that still need to be done at our house. It seems like it didn’t take us very long to do most of the major work (10K, six week renovation of a single family in GA) but we still end up with lots of nagging tiny projects like paint touch ups, yard stuff and finishing work.

When you do your own home renovations do you do them to 100% or does the process slow down after you get 95% of the way finished (functional but not ‘finished)? I think I need to take out the catheter and bed pan and spend a weekend finishing up all the small projects.

Ah, the glorious punch list. I completely agree with your assessment of the last 5% of a project – in my experience the finishing details always drag on longer than you expect – regardless of whether you are outsourcing or insourcing the work. At this point my husband and I have re-done 2 kitchens, 3 bathrooms, and a ton of other projects ourselves, and have also contracted out certain projects (post-kid we have waaaay less time unfortunately and so have had to compromise for the sake of getting things done).

And yet a number of details still remain – in fact a few weeks ago I FINALLY fixed up the drywall and re-painted a corner of the island – where the bulk of the project had been done for over 2 years! The only way I have managed to get things done is to create the punch list in writing, hang it up where I can see it, and every week try to check at least one item off. Good luck!

do not have the scale/ size at hand, but this idea is VERY needed for older people or people with disabilities. No barriers & ease of access for a great shower. Big plus point for a rental in some areas I would think. AND every one can use it like it is.

You can use the fabric shower curtain by itself? I always thought it needed a liner. After a few showers, wouldn’t it get musty or stiff like using the same bath towels for more than a week? Does it require frequent washing then?

I like reading the generating income at your own home articles. HubbyJD’s goal is to own a duplex and live in one half of it. We walk around our neighborhood regularly ‘window shopping’ from the street. (I guess if we ever found an awesome deal, we’d jump on it – but at this point we’re busy paying off our student loans.)

Were the owners going to supply dishes in the kitchen? I’ve been to hotels/rentals where they did that – in that case you definitely want more cabinets to keep the dishes out of sight.

Ahh, but that’s just the thing with this new open kitchen invention: it turns out that you DON’T have to keep your dishes out of sight! Some brilliant person realized that a stack of nicely colored plates and a few coordinated cups actually look pretty nice. And since then, the world has been freed from the need for upper cabinets (check out a few issues of dwell if you don’t believe me ;-))

I’m not disagreeing with the open shelf concept. It works great when you have nice colorful dishes that look good. The rentals I have seen have been a mixed bag – some were assorted cutlery and chipped dishes. I assume most people traveling to Hawaii didn’t pack their own month/week of dishes which would probably lead to buying disposable dishes. That’s why I was wondering what the owners were doing about it. (I bet Hawaii has a higher cost for trash disposal than in the mainland.)

Noooooo! Not tile countertops! As a renter in a house with tile countertops, I have to tell you that they’re a pain in the ass to clean. Food gets stuck in the cracks between the tiles, and it makes it harder to knead bread (so says my pastry-chef wife). Too late for the Hawaii home, but on behalf of discerning renters everywhere, please don’t use tile countertops in the future!

Bah.. not all tile countertops are created equal! If you use huge, impermeable tiles and zero width joints, there is almost no crackage to clean. This kitchenette only has 4 joints.

On the other hand, one of my houses came with a DIY tile job with 4″ white tiles installed all askew and lumpy, with 1/2″ spaces between them done in WHITE grout. Even me, as an anti-cleanfreak, had daily fantasies about hunting down that previous owner and making her scrub and bleach the countertops for me daily.

I’d still gladly live in a house with well-tiled countertops now, even with the option of any material. Not quite as nice as a sheet of pure polished stone, but if I make that fine of a distinction I might as well get a bedpan and a catheter to go with it. ;-)

I’m glad you understand my plight. I’m sure the tiles in the photo above were installed more carefully than the ones in the place I’m living in now. I’d like to hunt down this landlord too, but he lives in the Mid-East, so it would be a long hunt.

Interested to know how you edged the kitchen tile…. It is hard to tell from the pic. Did you cut a short strip and attach to the bottom and polish until perfectly even? I can’t see the grout line there. I have used various strategies… Bull nose, cutting 45’s on the edges, etc, but I find this to be the most difficult place to make granite tile look like a slab. You got great looking results. Well done! …. Great way to add class to a kitchen without breaking the bank for a slab.

Very enjoyable to follow your thread. Congratulations on a successful job.

Where did you get the 12×30 granite tiles at “low cost?”
I’m winding down a kitchen remod and trying to figure out what to do for counter top. Solid suface and granite are soooo expensive, post formed laminate tops won’t work because of my layout, and I can’t hardly bear to build my own laminate tops because of all the seams that creates (had real water damage problems at seams in previous kitchen)
Any other ideas out there?

Got the granite tile at Home Depot. The size is actually 18″ x ~32″ (don’t recall exact length). The cost ended up around $7/sf. HD has several different colors in stock. I would’ve rather had a nice tropical-green colored solid slab of granite, but this turned out great and was much more cost effective.

To cut granite, you’ll need a tile saw or a granite circular saw. We had both and used the tile saw more than the circular saw.

Phew, it has taken me 6 months, but I have finally read all the article with comments (sometimes an even better source of information new perspectives)! As a reward I’ve given myself a new whiskered name and joined the forum. Whoop.

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